Big electricity users get walloped on bills

San Diego Gas & Electric is forewarning heavy users of home electricity that their utility bill will increase disproportionately at the end of August.

SDG&E recently was granted a 7.6 percent revenue increase. The change is retroactive to the start of 2012, so many bills will rise even more to catch up.

Most customers won't see much of a change. Those who use significantly more than the average household -- one-quarter of customers in San Diego and southern Orange counties -- can prepare to pay a lot more, by SDG&E's estimate.

The utility is distributing advisories to those customers on measures they can take to conserve power and otherwise prepare for the changes.

Under a complex rate formula, a coastal customer using 400 kilowatt hours of electricity can expect to see their bill increase by $5 to $91, while an 800 kilowatt customer would see an increase of $56 to $255. Prices vary depending on what climate zone a consumer lives in -- coastal, inland, mountain or desert.

The average utility customer uses about 500 kilowatt hours per month.

Before the new rate increase, SDG&E's residential rates led the state among major investor owned utilities and major municipal utilities such as Los Angeles Department of Water & Power and the Imperial Irrigation District, according to the Energy Information Administration, a statistical arm of the Energy Department. California ranks ninth in the U.S. for residential electricity prices.

Days may be numbered for the state's current rate structure, under which the price per kilowatt hour can double as the customer uses more power in any given month.

SDG&E and the state's two other investor-owned utilities are lobbying state lawmakers and utility regulators to revamp the current structure for charging residential customers.

Pending legislation, approved by the State Assembly in late May, would strike a new balance between trying to reward conservation and efforts to make electricity rates reflect the actual cost of serving each customer. The Senate committee on energy, utilities and communications takes up the legislation on Tuesday.

Current residential electricity rates also are guided by the desire to mitigate the effect of price swings on presumably lower-income customers and ensure essential services remain affordable to all. Assembly Bill 327 seeks to preserve some customer protections, authorizing the California Public Utilities Commission to redesign the rate structure in proceedings that already are well under way.

The current methodology was designed as one remedy to California's 2000-2001 energy crisis, whose rolling blackouts and exponential price spikes were traced to market manipulation.

A host of private-sector and environmental groups want residential rates to better reflect the peaks and valleys of energy costs throughout the day. That responsive pricing increasingly is seen as key to meeting California's ambitious goals for reducing greenhouse gas emissions.

Meanwhile, SDG&E also has urged more low-income customers to take advantage of a June 1 expansion in eligibility for discounts on monthly bills.

Maximum qualifying income rose to $22,980 for a sole occupant and to $47,100 for a family of four. SDG&E estimated at the the change could qualify an addition 50,000 more customers for discounts under California Alternate Rates for Energy and a potential 20 percent discount on their utility bill.